Assignment:
Describe and show on a separate graph how each of the following developments would affect the market price and quantity of chocolate chip cookies.
a. The end of conflicts in major cocoa-producing regions lowers the costs of producing cocoa, and so causes the price of cocoa (a major ingredient in chocolate) to fall.
b. Improvements in dairy farming lead the price of milk (which many people enjoy having with chocolate chip cookies) to fall.
c. In an effort to improve health, the government imposes a tax on chocolate chip cookies of 25 cents per cookie.
d. New studies suggest that chocolate has health benefits, and, at the same time, a drought in the Midwest causes the price of wheat (a major ingredient in flour) to rise.